All Forum Posts by: Tony H.

Hi BP,

First of all, I apologize if I post this in the wrong forum. It's been a while since I posted on BP. and I finally have the time to go back in here =)

Me and my wife are now hitting a crossroad in our lives and I feel to get some insights from you guys.

Here is the situation:

We have a 2bed/2bath condo here in the Bay Area (East Bay) that we currently live in. PITI + HOA is about $2100. We are at Year 6 (24 years left to go!) - the problem with this condo is that we outgrow it. We have 2 kids and we are starting to feel it's too small. We dont have any storage or garage to put our stuffs (and we dont have that many stuffs).

We sold our duplex 6 months ago (made about 80% ROI) and used it to buy a single home up there. We REALLY like the home and its location.

We rent the house out with negative cashflow (about $200 which is very minimal impact to us). Yes, this may be a big NO-NO for most of you, but we are considering to relocate there in the future to have more space. We really like the house and its location that we dont mind the negative cashflow at all. Plus, rents keep going up in that area we think we should be break even in a couple years. PITI on the house now is $3100.

Now, our REAL problem is that if we move to that house, we will make a lot less money (because it wont be Bay Area salary). 

I am debating whether to :

1. sell the Condo and use the proceed to pay the house. It wont be paid off, but will shave of 26 years of mortgage payments. Leaving 4 years left to pay. At $3,100 a month for 4 years would be a major hit to our income (remember, we will make less if we move). I am not sure if I should just suck it up for 4 years, and mortgage free after that. Or Refi for 15 years to ease the pain in our household income.

OR

2. Rent out the condo and make $700 a month cashflow to help pay the mortgage on the house. Move to the house and Refi to get lower payment. I estimated the PITI will probably $2900 after Refi.

Which way should I choose? A friend of mine believes bay area property will just keep rising.. he said to keep my condo regardless. However, I noticed my condo value has gone down by about 50-60k in the last 1 year.. 

Sorry for the long post! I appreciate your insights. I may missed out on a few details, but if need more details in order to give insights, please let me know.

Thank you!!

 Make sense. Thank you!

I wouldnt mention anything next time. 

I thought about disclosing it because I didnt want the hassle of having to "kick" someone out 1 year from now. My rental is geared for a long term, and the tenants who are interested are mostly families who is looking for a longer term.

So I was just trying to be nice to them by letting them know in advance. But I guess not everyone is happy with my intention.

Thank you!

Hi BP,

It's been a while since I posted here. I recently posted a rental and there is a possibility that I will be moving into the place in about a year.

Am I required to disclose that in the Ad? During open house, I mentioned this to everyone, and 1 of them actually not happy I said that.

I am still unsure if I want to move in next year, but definitely a possibility. 

The place has been rented now to someone else who wants only 1 year lease. However, I'd like to know what should I do in the future to avoid conflicts.

Thanks,

TH

@Ashish Acharya

Thank you!

@Ashish Acharya

Ahh i see what you mean now.

When I purchased the property, it was assessed at 50k/250k

So thats about 20%.

Now they are telling me that the assessed value is more than 40%.

I used 20% back in 2017. Should i amend it? Im guessing no, but i want to be sure.

Thanks

@Bill Brandt

Looking up neighbors land assessments is a good idea. I will do that.

I dont plan on amending every time assessment.

Im just concerned because the first value that i used initially is way off.

But i guess, amending it will just trigger audits, etc.

Thanks Bill!

@Bill Brandt

I get what you are saying. Im just confused why the land assessment went up more than double.

From 50 to 130k.

Although I dont believe the land value is that high, dont i have to use that in order to calculate my depreciation?

Thanks

@Ashish Acharya

50k as in 50,000 dollars.

The home was assessed at $253,000 before I purchased it at 300,000.

I never got the revised assessment until a year later.

Should I amend my 2017 tax to correct the depreciation?

Hi BP,

I cant seem to find an answer to my situation here, unless I missed it.

Here is the problem. When I acquire the my duplex back in 2017, the tax assessment for the land was about 50k.

I subtracted that from my purchase price 300k to get 250k depreciable value.

A year later, I received a supplemental tax bill with revised assessed value that match my purchase price total.

However this time they assess the land to be $130k and 170k for the home.

Now im way off in my 2017 tax returns.

Any suggestions?

Thanks